TNAG-2424-FCO40-3526-Hong-Kong-Her-Majesty-s-Overseas-Civil-Service-(HMOCS)-poli-1992 — Page 193

aefl.sk/sb/6.19.5

then hold further

CONFIDENTIAL

consultations with them about this and the

Compensation/incentive proposal. We must not prejudge what Ministers may decide on the safeguard question: they may decide against the provision of a safeguard at taxpayers' expense and

consider that the HKG should make provision for this, through

capitalisation, or through the private sector. They may consider that it is simply too early to decide. In either case, the line

propose for Mr Goodlad would be prejudicial and most

unfortunate.

you

I

suggest therefore that you delete the fourth and fifth indents of your proposed line to take, and shorten the sixth to say only that further consultations on the compensation/incentive scheme

will be undertaken as soon as possible. On the question of a sterling safeguard, Mr Goodlad will need to use the defensive line we agreed for briefing at the time of the announcement of the compensation/incentive scheme.

You say that you have legal advice that, if we decided against

providing a sterling safeguard, we should have to consult the Association before taking and promulgating a final decision. I

should be interested to see this advice, and the basis on which it

rests. Presumably it would become operational only at the point

at which HMG reached such a decision.

Frm

Your

Sandm

MRS S D BROWN

CONFIDENTIAL